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Documents the Lender May Request

from the "Small Farm Handbook"

Your resume.
Your business plan.
Financial records for each of the last three to five years, including:

  • balance sheets listing assets and liabilities
  • income statements (profit and loss statement)
  • cash flow statements showing when and how much money is required for day-to-day operations, and when and from where it comes. you may need a loan if income lags behind sales by 30, 60, or 90 days - the customer's payment period
  • income tax statements
  • collectible notes and accounts receivable (dates, sources, terms)
  • information on outstanding loans (lender, terms, conditions, account numbers, interest rate, maturity)

Property information

  • Equipment serial numbers and descriptions
  • Titles to real estate and personal property (such as machinery), particularly if these assets are to be used as security for the loan
  • Insurance policies from equipment, liabilities, and crops (carrier, policynumber, amount of coverage)

Farm business information

  • Value and quantity of crops listed as assets (estimated by outside party)
  • Cropping plans and map of fields (including water sources, location of wells, pump information, planting dates, varieties for permanent plantings)
  • Soil maps
  • Lease agreements (including the cash rent or share crop agreement and what will be grown on the leased land)
  • Marketing plans and contracts (including sales contracts and cooperative memberships)
  • Three to five years of production history

Questions to Ask a Lender

  • Can real estate be used as security?
  • What is the appraisal fee?
  • Is there an application or commitment fee? Is the fee returned if the loan is made? Is it returned if the loan is not made?
  • Are there closing costs, inspection fees, charges for documents and who pays for them? Can they be made part of the loan?
  • Will maintaining a bank account at the lending institution reduce the cost of the loan?
  • What are the rate/term options?